Nordea Bank Abp (NDAFI) Earnings Call Transcript & Summary

[Presentation] Good afternoon, everyone, and welcome to Nordea's 2025 Capital Markets Day. I'm Ilkka Ottoila, Head of Investor Relations and I'll be your moderator for the day. Today, we'll dive into the details behind our 2030 strategy with updated priorities and financial targets. We are excited to have the opportunity to talk about how we will take Nordea to the next level and create shareholder value. Let me briefly go through the agenda, which will last for roughly 3 hours in total. We will start with the CEO session. This will be followed by 10-minute presentations, both from the heads of each of our 4 business areas. After this, we'll take a short 15-minute break. After the break, we will have a more detailed update by our Chief Information Officer on how we deliver Nordic scale benefits. And finally, our CFO, will conclude with a deep dive into the financials. After the presentations, we will have a Q&A session lasting for roughly 30 -- I'm sorry, 60 minutes. And our program is planned to end slightly after 3:00 p.m. U.K. time. I'd like to give you very short instructions for the Q&A session. So you'll be able to ask questions in 2 different ways, in person here in London and also through the chat function on the webcast. We very much look forward to your questions and have reserved quite a lot of time for this. We will do our best to take as many questions as possible. And finally, just a quick note, today's presentations include forward-looking statements. Relevant disclaimers have been included in the materials. But now it's time to start the first presenter, our CEO, Frank Vang-Jensen.

Good afternoon, ladies and gentlemen, and welcome to our Capital Markets Day. Six years ago, we set out to change Nordea's direction, step up and improve our performance. We wanted to fix the basics, truly put customers first and become more competitive. By 2022, the turnaround was clear. The approach was working. We then further raised the bar for performance with a goal to create best-in-class omnichannel customer experiences, deliver profitable growth, increase operational and capital efficiency and drive further value creation for our shareholders. I believe we have delivered very well. Today, Nordea is strong and one of the best performing financial services groups in Europe. Over the past 6 years, we have delivered a total shareholder return of 292% or 25% per annum. Now we will take Nordea to the next level. And today, we present our plans to do that. Let me start with a quick snapshot of Nordea. We are the largest and leading financial services group in the Nordics, with a universal banking model that spans 4 business areas. One, serving the everyday banking needs of individuals and households. One, a trusted partner for small and medium-sized businesses; and two, focused, respectively, on large corporates and institutions and wealth management. Each business area offers a broad range of services supported by strong advisory teams. We have strong positions in each of our home markets in all business areas. No other bank has our pan-Nordic footprint, and that makes us unique and gives us scale benefits that cannot easily be copied. Being the largest player in the Nordics, we also have the biggest investment capacity. That has been put to good use, supporting our growth, technology, digital services and risk management in recent years, enabling us to strengthen considerably. Our scale also supports some of the lowest funding costs and credit losses among banks in Europe, which support a lower relative cost of risk and the lowest earnings volatility. The diversification and resilience of Nordea is clear when we look at our business mix. Our income, lending and profits are well balanced across our markets and sectors. And this has supported high profitability with low volatility in our earnings. Our average quarterly return on equity is higher than the Nordic and European average. Earnings per share volatility and funding costs are much lower. Together these strengths distinguish us from our peers. That is the foundation we continue to deliver from, and it is a strong one, not just because of what we do, but because of where we are. We are Nordic to the core, and our home markets are among the wealthiest and most resilient economies in Europe. If you put the 4 countries together, they would be the 12th largest economy in the world. The Nordics, our society is built on trust and a strong culture of learning and innovation. They are also underpinned by strong social networks or safety nets, sorry, which give people the confidence to move forward in their life. And together, these foundations help promote economic and political stability. The Nordics are fast adopters of new technology. They are highly digital and they are entrepreneurial and competitive. The largest Nordic firms, our customers have learned to find their way and scale up competing on quality and innovation. For them, it's not necessary about being the biggest, and some of them are, but being the best. And that approach has worked. Over the past 2 decades, Nordic firms have outperformed their peers in the U.S., Europe and Asia in terms of TSR. All this makes our region an excellent market for financial services and a solid platform for Nordea's long-term growth. Credibility and trust come from saying what you do and doing it. Since 2019, we have been working to rebuild and strengthen trust among all our stakeholders. We started by sharpening our focus on execution and accountability and laying down solid foundations. That was the first phase. The second phase from 2022 has been about building on those foundations and continuing to improve our performance. The priorities and targets we set then were ambitious, but concrete and achievable if we executed well. And I believe we have done just that. For Nordea, everything starts with the customer. And there, we have made real progress. Most importantly, customer satisfaction has increased among both households and corporates. A big driver behind that is our digital offering. The experience is smoother, more intuitive and gives customers far greater control over their finances. We're now seen as the leading provider of digital financial services in the Nordics and one of the best in Europe. Growth has followed. We have added more than 1 million new digital customers. Since 2022, all 4 business areas have captured market shares. And of our 4 home markets, Sweden has been especially strong for us. We set out to reclaim a leading position in Sweden, which is by no means an easy task. It's one of the most competitive banking markets in Europe. But we have built real momentum. Our mortgage market share has grown significantly, and we have made solid gains in private banking and among small and medium-sized businesses. Back in 2020, we were ranked fifth in mid-corps in the Prospera Customer Satisfaction Survey. Now we are #1. We also hold the top spot among small corporates. And underscoring our strong progress, in Sweden, we were recently named Bank of the Year. It's a clear sign that we are doing many things right. Of course, growth has not been limited to Sweden. We have also grown our position in the other countries. In Norway, we now have more than 1 million customers following 2 bolt-on acquisitions, the most recent of which was completed a year ago. We are growing and taking market shares, especially in deposits. And we have a strong development in savings, outpacing the market for the past 2 years. Other parts of our business are also seeing good growth, including life and pensions, private banking and corporate banking, where we continue to use our size and scale to position Nordea as the best partner. We have become the leading provider of Nordic bond financing and a recognized global leader in sustainable lending. To support operational efficiency, we have made several structural improvements, which have reshaped the business to deliver sustainable higher profitability. This has been driven by the significant investments we have made in technology and data and digital services and a much stronger focus on and disciplined approach to capital consumption. Income and costs are now better balanced and each business area has lifted its return on allocated equity significantly. When we look at financial performance, we have delivered on our financial targets ahead of time, reaching a return on equity level of greater than 50% and more importantly, staying above 15%. Of course, we have not operated in isolation. The world has changed a lot since '22 when we set our targets. Our last Capital Markets Day took place just a few days before Russia's full-scale invasion of Ukraine. Inflation jumped and interest rates increased after more than a decade at 0. But what that happened -- when that happened, we did not just sit back, we raised our ambition. Our initial return on equity target was greater than 13%. And as the environment shifted, we lifted it to greater than 15%. Six years ago, Nordea was an underperformer among the world's 100 biggest listed banks by return on equity. We are now in the top 20 with good momentum. Something else we have done clear is to deliver positive jaws. We always want to grow income faster than costs. Of course, this year has been a bit of an outlier given the rate environment. But the way things have developed is also by design. We made a clear choice to keep investing strategically, making investments that are already strengthening the group and will continue to do so. While investments are high, they have leveled off over the past couple of quarters. And we have delivered on our guided cost-to-income ratio. Nordea's financial performance has been good, and it has supported consistent and strong capital generation, which in turn has enabled solid shareholder distributions and market-leading shareholder returns, which has been significantly higher than our Nordic peer average. Are we pleased with the progress? We are. It's a strong base to build on, and we are moving in the right direction. But now we are focused on what's ahead in this third phase of Nordea's development and growth. The coming years will be about taking Nordea to the next level. When you are looking at Nordea in 2030, there should be no doubt that we are the best-performing financial services group in the Nordic region. The pace of change in the financial sector is accelerating. But that isn't something that concerns us. On the contrary, our ambition is to continue to lead, and we are better equipped than ever to take the leading role because we act from a position of strength. Multiple forces are shaping the financial industry and some are long familiar to us. We have a world that is volatile and evolving. We have increase in digitalization, and we have challengers that want to take on incumbents. And some forces, we expect to be more dominant going forward. AI is obviously one of them, and it will drive many banking processes. All of these developments have been taken into account when forming our strategy and our conclusion is that they play in our advantage. A couple of examples. One is that scale will become even more important. It will drive efficiency, resilience and customer value. It would also give Nordea the edge when we attract talent to Nordea. Second, like much of the world, the Nordic population are aging and the need for long-term savings and better pension solution will continue to grow. We are well equipped to meet this demand as we are the largest asset manager in our region and one of the largest in Europe. Lastly, trust. We believe trust will matter more than ever for both private and corporate customers when choosing a financial partner. It's more complex today. There are more uncertainty, more noise and threats can come from anywhere. That makes trust more valuable and harder to earn and keep. We have invested billions of euros over the past 5 to 6 years to build a safer and more resilient company. For us, it's really at the heart of what we do. And we think we are ahead of many of our peers in this respect. Our ambition in this new era is high, and this is reflected in our financial targets. We are looking across to 2030, which is clearly long term. But it's consistent with our approach to value creation and delivering sustainable progress over time. Our first target is to deliver a return on equity of greater than 15% each year throughout to 2030 and to be significantly higher in 2030 itself. Our second target is to deliver a cost-to-income ratio of 40% to 42% in 2030. Getting to that cost-to-income ratio level will take hard work and will be a gradual progress. But on these targets -- of these targets -- I would say, both of these targets are ambitious, but concrete, and we are fully committed to achieving them. We also have an ambition to deliver earnings per share of around EUR 2 by 2030, driven by a strong improvement in underlying performance. That's where we are going. And to get there, we have built a strategic plan around 3 key priorities. The first is growth. We have decided to focus on and invest in 6 attractive growth areas. These 6 areas are a mix of geographic markets where we see lots of room to grow and segments which have a strong growth outlook, in particular, segments where savings play a big role. The second priority is to lead with a compelling customer offering, with stronger value propositions in key segments, all brought together in an outstanding digital experience. Today, customers can easily manage their finances digitally while always having our advisers and support close at hand. That combination of freedom and support is one of our real strengths. In the next phase, we want the digital experience itself to feel even more supportive and personal with tailored and adaptive experiences that fit the customers' financial situation. We will accelerate our work on personalization to deliver more timely insight, relevant product suggestions and attractive offers to ensure that customers, both households and corporates, feel well supported and able to make smart, informed decisions. My colleagues running the business areas will talk more about this pillar in the presentations. The third priority is about unlocking the full potential of our unique Nordic scale. We already have scale benefits in several areas. But after simplifying our operating model, and investing heavily, we are now ready to take the next big step. That work is centered around 4 big product areas, mortgages, corporate lending, payment and savings. Across all 3 priorities, technology, data and AI will play a very important role. They will help us to create more personalized customer offerings, respond faster to credit requests and run the most cost-efficient operations. We will also maintain our strong commitment to sustainability. It's important, and we support our customers in their transitions. We have made good progress in this area and sustainability is now fully embedded in our strategy, processes and operations. All in all, we are convinced that our plan will lead to even stronger customer experiences, significantly increased cost efficiency and create lasting value for our shareholders. You can also be assured that this plan will be executed with the same rigor and focus we have applied over the past 2 strategy periods. We do what we say. That commitment is reflected in our new vision. We aim to be the best performing financial services group in the Nordics, period. The 6 growth areas play an essential part in the strategic plan. In all of them, we will drive focused and profitable growth. Each has been carefully chosen, and they offer solid underlying market growth, and because, in several of them, we do not yet hold the leading position we aspire to. So we have a job to do. But we know we can do this. We have proven it over the past few years. Our progress in Sweden is a clear example. Sweden remains a key focus area, and we see we can continue to grow by making the most of our enhanced saving and payment offerings, our best-in-class digital platforms and our strong local presence in the major cities and towns. Norway is our second growth priority. Our 2 acquisitions there in recent years have given us a solid platform to accelerate growth. Our goal is to broaden and deepen customer relationships, ensuring that clients choose to meet all the financial needs with us. But to be clear, let me assure you that we will not be satisfied until profitability in Norway matches that of our 3 other home markets. From that perspective, we see 2030 as a milestone on that path, not the finish line. So Sweden and Norway, both markets with lots of room to grow. A strong common theme in the strategy is to build stronger relationships with our customers. We'll do this by offering a broader and more attractive range of products, improving accessibility, strengthening our brand and showing customers the benefits of bringing more of the financial needs to us. This is a model we will continue to develop for both households and corporates. Here, it's summarized as cross sales. Strong anchor products will be essential to making it work, and we will, therefore, continue to invest in our savings and investments offering as well as in our cash management services. Life and Pension, in particular, is an area where we have the potential to deepen relationships with our customers. Momentum has been really strong in this part of the business, supported by bolt-on acquisitions, but we are already the leader. We now have a unique opportunity to improve our position within Life and Pensions, predominantly by cross-selling pension products to our large base of small- and medium-sized corporate customers as well as to private customers. The underlying market outlook is also positive, driven by the aging population and growing uncertainty about what the public pension systems will be able to deliver. The last 2 areas with attractive growth potential for Nordea is private banking and small businesses. Private banking is the growth area where we see the greatest potential. The market is expanding quickly, and we are well placed to reach the leading position across the Nordic region that we aim for. We will invest to strengthen our digital services to complement what we have today, which is a very adviser-dominated approach, and we aim to grow our share in all countries. To help us, we have an in-house globally competitive asset management team. And then on small businesses. Nordea has done very well, serving midsized corporates and retail customers. Now we want to replicate that success with the small business segment, which is a huge step in the Nordics and is very profitable, especially when you have large scale. Our strong industry expertise and digital solutions will help us here. Our business area heads will provide more details about all 6 growth areas in the sessions. Our Nordic scale is a key source of competitive advantage for Nordea. Scale was the driving force behind our creation 25 years ago. Over time, we have built it deliberately. We have already delivered clear scale benefits, for example, in central functions and in our Large Corporate and Asset Management business. But more gains lie ahead. Now we will take the next decisive steps to ensure that we unlock those benefits across all of Nordea. This is about increasing our competitiveness. We will deliver services to our customers faster, better and at lower cost. We will significantly improve our cost position and make Nordea an even more attractive partner for all stakeholders. This is unique for Nordea and something we own. The turnaround of the past 6 years means the time is now right. The operating model has been simplified. The accountability culture is in place, and we have made significant investments to build a market-leading digital franchise. Technology now plays a much bigger role and our foundation is much stronger. So we are in a very good position to succeed, and we know how to go about it. The focus of the work will be on our 4 key product areas and on making the processes in these areas very lean, automated and efficient. The business areas are in the driver seat and setting the target picture and redesigning the processes. Meanwhile, our technology team will be an active partner supporting in the delivery. Technology and especially AI will play an important role in this transformation, helping us to turn local process into Nordic processes. This will make them faster and more transparent with AI-enabled automation and human support brought into play at key moments, which, for example, means in practice that customers get faster decisions on lending and simpler and better savings and payment experiences. And it means us being able to provide those things in a much more efficient way. We will drive Nordic scale benefits wherever feasible and wherever it makes sense. And that will give us a clear edge in the market. We also see potential for major scale benefits within our technology itself by reducing platforms and applications, by modernizing legacy systems and by improving engineering productivity. These efforts will also make our technology more resilient and secure. We are clear about the approach because we have learned a great deal from the work to upgrade our core banking platform, which we have now completed in Denmark and Finland. While this delivers clear benefits, it has also taught us that there are no silver bullets. Building scale is about doing many smaller things right. That's the approach we will take with multiple smaller scale initiatives. By 2030, more than 60% of workloads will be running on our modern systems, making them faster, more reliable and secure and easier to run. In total, by delivering our Nordic scale benefits, we target a cost takeout of EUR 600 million. Kirsten will later outline how we are going to do it, while Ian will provide more details about the financial outcome of these efficiency improvements. We have delivered 2 strong strategy periods, and we will make this one our third. We clearly aim to be the best-performing financial services group in the Nordics with faster than market income growth, a leading customer experience and clearly demonstrated scale benefits to drive efficiency and competitive advantage, all leading to superior earnings per share growth and sustained high profitability. I'm confident that we have what it takes. Strong businesses, great digital services and technology, unique Nordic scale. We also have a focused team that is both excited and determined to deliver. And I can't stress enough what that means. We have built a performance culture, and we have come a long way. The difference from a few years ago is night-and-day. Nordea today is a different company and our employees say so. Still, we are not done yet. We can still raise our game and take Nordea to the next level. We look forward to showing you that we will deliver. Thank you. And now I would like to welcome on stage Head of Personal Banking, Sara Mella.

Thank you, Frank. Good afternoon. I'm Sara Mella, Head of Personal Banking. And it is my pleasure to share our progress and the strategic direction as we look towards 2030. I've been in this role for 6 years now, this is actually my third Capital Markets Day, and I have to say, when I look ahead the next 5 years, our journey in Personal Banking will be more transformational than the past 5 years. So let me now share how we have strengthened our unique pan-Nordic franchise and then present our strategic vision for continued growth, efficiencies and innovation in the years ahead. Personal Banking serves 6.5 million active household customers across the Nordics. We are among the top 3 in all of our markets. And our business is well diversified. Each of our 3 largest countries contributes around 25% to 30% of the income. Our product mix spans across mortgages, deposits, savings and payments, also equally on income. Now this scale gives us clear advantages. We combine local expertise with shared platforms and technology to deliver consistent, high-quality service, while driving efficiency and innovation across all markets. Over the current strategy period, we have delivered on our plan, and we have built a strong foundation for the next strategy period and for the future. We have added over 0.5 million new relationship customers, also supported by the very successful acquisition in Norway. Income grew by 8% annually and interest rates, they drive less than half of that. Majority comes from higher volumes, gained market shares and disciplined pricing. We improved our cost-to-income ratio by 4 percentage points and accelerated digital adoption. 1.1 million more customers are now digitally active than 2021. In short, strong growth, improved efficiency and top-rated digital bank position us well for the next strategy period. Now looking ahead, our strategy for the next period is clear and is built on 3 pillars: first, strong focus on growth; second, upgrade and extend our offerings, securing to be market leading; and then third, use our Nordic scale to deliver operational excellence. We will, over the next strategy period, become a fundamentally different bank, significantly more tech and AI powered, data-driven and truly digital and much more efficient. We expect to deliver around 5% average income growth over the next period and a positive jaw development of 3.5%. This will be driven by a broader, more profitable business mix and a continued success in mortgages and savings. We are investing in digital sales, AI and enhanced savings offerings to deliver superior digital experience, while simplifying our core processes. Our focus is clear: investing for growth, drive efficiency and capture market momentum. Let me now share and highlight the 3 key areas where I expect us to deliver growth above the market. First, Sweden. Sweden is our largest country with a strong growth potential. We already lead in mortgages and pensions, combining best-in-class digital processes with human advisory when needed. Our proven model will now be scaled to attract more savers and strengthen our premium offering. We expect to grow income 1.5x faster than the market and increase savings net flow by 50%. Second, Norway. Norway is on a journey to a better profitability. And I have no doubts that Norway will reach the same level as the other countries in profitability. Our shift to a more capital-light income mix is working with significant upside in both legacy and the acquired customers. We have already deepened relationships in the acquired portfolio and will leverage advanced digital sales to win new customers. We expect income growth in Norway also to be 1.5x above the market. And we also expect to increase our savings inflow by significant 350%. Then third, deepening customer relationships across all countries. AI-driven personalization is already boosting customer engagement. Around half of our customers are saving with us, presenting a major opportunity for top-ups and drive top-ups. As an example, if our existing savings customers increase their allocation to investment just with 1 percentage point, that will drive new inflow of EUR 1 billion. The remaining half of customers not yet saving with us offers a fantastic opportunity, which we will capture. With our data, tech and digital sales, we can now reach and impact our full customer base in the Nordics. Now this is my and my team's passion, and this is the way for future growth and sales and income growth. So our goal to grow ancillary income 15% above lending growth. Now to support this growth, our service model will evolve to be even more personalized and data-driven. We are delivering AI-powered mobile-first banking that integrates to our customers' daily lives and moments that matter. Proactive insights and smart recommendations will help customers to make better financial decisions with confidence. More than 80% of our sales will be digital by the end of this strategy period. We will continue to enhance our market-leading mobile solutions and develop best-in-class savings experience with a robust platform, competitive products and intuitive digital interface for our customers. Now it's not only about digitizing the customer-facing experience, we are embarking on a journey and transformational journey to change our operating model. Our advisers will be empowered with digital tools, real-time insights, while automated processes reduce administration, freeing up time for more customer meetings and better and more targeted advice. At the same time, we are building a common scalable digital Nordic service model, powered by AI, harmonized processes and improved efficiency across all markets. For example, harmonizing mortgage processes across the Nordics by leveraging shared technology will deliver over 30% lower processing time and doubling the adviser efficiency. Our ambitions are underpinned by clear financial targets. By 2030, we aim to achieve return on allocated equity clearly greater than 19%, while achieving a cost-to-income ratio below 43%. Delivering on these targets is transforming our performance. They reflect the confidence of the strength of our platform, the capabilities of our team, and the opportunities that lie ahead. Thank you for your attention. And now I'd like to hand over to Martin, the next presenter.

Thank you, Sara, and hello, everyone. My name is Martin Persson, and I can tell you, I am super proud in representing our Asset and Wealth Management business in Nordea. That's a role I took on in the beginning of this year after more than 8 years heading our Large Corporate & Institutions business area. The starting point of our 2030 strategy is very unique. We run the largest savings franchise in the Nordics, where we are combining the largest Private Banking and Asset Management business and the second largest Life and Pension company. The main purpose of our 2 growth areas, Private Banking and Life and Pension is simply to ambitiously drive above-market growth. When it comes to our market-leading Asset Management business, we are seeing a gradual improvement over the last many years of negative flow developments in our institutional and wholesale distribution segment. Here, we will now be super focused in driving our 3 strongholds in European fixed income, our beta plus product offering, that is our response to passives, and our sustainability investment strategies throughout our strategy period. For me, it's also very important balancing or navigating this attractive structural growth opportunities in the savings and investment area with the ongoing margin challenges that we see across many of our customer segments. The essence of our growth is then simply Private Banking and Life and Pension, left-hand side of this page. Superior value propositions in each and every one of our customer segments, combined with detailed plans how to mitigate the ongoing margin challenges, combined with a much higher ambition in our digital customer experience. That's the essence of our offering, the midpart here. And Nordic scale, that's the enabler for us to finance the enhanced growth and the improved offering. I genuinely feel we have a winning vision and clear and robust strategic priorities to drive this. This will, of course, then result in formidable positive jaws throughout our strategy period, where our Nordic scale enable us to limit cost growth to inflationary levels. Let us now look into our first growth area, Private Banking, where we aim to accelerate an already strong momentum and where we are already outgrowing the market in both Norway and Sweden. We will grow our customer base by 30% and income by 9% CAGR. To achieve this above-market growth, we will focus on 5 main areas. Number one, we will double our digital investments to significantly improve the customer digital experience, and this will also include a more ambitious offering for the self-directed customer segment. Two, we will hire 100 new private banking advisers from our already strong base of 500 today across the Nordics. We will significantly raise the bar on external customer acquisitions, where we will target 60% of new customers coming from the outside. This will require a stronger hunter mentality culture among our advisory teams. Four, create clear value propositions for each of our customer segments, for affluent, for high net worth and for the ultra segment. We will prioritize the must-win affluent segment first. And five, products. We have a strong starting point with a market-leading asset management in-house offering with 82% of funds currently outperforming benchmarks over a 3-year period. And with a broad offering and faster time to market than any other Nordic bank can offer in our region. Now we will focus extra on the discretionary offering, alternatives and margin lending to drive growth and to mitigate margin challenges. We have low penetration in all these 3 mentioned products. Further, Norway and Sweden are the 2 fastest-growing Private Banking markets in the Nordics. This is where we are already growing faster than the market, and we are underpenetrated in both these markets. That is why we will allocate more investments and more resources to Norway and Sweden to fuel this above-market growth. By 2030, we will generate EUR 1.5 billion of capital-light income in private banking. Our second growth area, Life and Pension. That is a fast-growing hidden gem. With 8% annual income growth, we will become the largest Life and Pension company in the Nordics by 2030. There are structural tailwinds in the Nordic Life and Pension industry. We will see 20% growth in the plus 65-year olds in the next 15 years alone, which means that structurally higher savings are needed. Both the Private and Corporate businesses, therefore, have strong growth drivers and the Nordea customer base is underpenetrated in both. The good news is that our business model is already proven. We have tripled flows since 2022. And with our reentry into Denmark, we expect to grow further. We are leading the way with digital innovation in a rather analog industry. We are now outgrowing the market in 3 of 4 Nordic countries, driven by stronger collaboration between our business areas as well as our digital leadership. We now plan to roll out the local digital successes, both within corporates and the private segment, to all our Nordic countries to reap the benefits of our obvious Nordic scale. Let me give you another example. Our ability to digitalize insurance products into the mortgage process in Sara's retail area should make it possible for us to scale this to our large existing retail base. Only 17% of our customers currently have these products. We should be able to take that close to the best-in-class benchmark of 40%. We are targeting 5% positive jaws throughout the strategy period. Life and Pension is a fast-growing hidden gem where we are confident that we can deliver above-market growth with scale. By 2030, we will generate EUR 1 billion of capital-light income in Life and Pensions. To finance the investments in the growth that I presented, the main enabler for productivity will be the scale benefits from technology, data and AI. With this, we target 30% adviser efficiency in our affluent segment, combined with 50% reduction in legacy applications. This will be done through significant reduction of local variations, instilling common Nordic operating models as well as deploying digital tools to make advisers more efficient. Kirsten will soon also present how we will harness group-wide data to develop more personalized sales and service, how we can further automate customer journeys and how our customer needs will be met in an even better way when supported by digital tools and data-driven insights. So with the most competent and the most passionate team back home, I am confident to deliver a market-leading return on our allocated equity by 2030 with a cost-to-income ratio below 36%. That is down from roughly 45% today. Thank you. And I will now hand over to Nina in Business Banking.

Thank you, Martin. My name is Nina Arkilahti, Head of Business Banking. And I'm proud to say that we are the trusted partner for nearly 0.5 million SMEs across the Nordics, where we are the largest financial services provider to SMEs. This market position has been built on our universal relationship banking model, broad product offering and Nordic footprint. We serve customers from creation through scaling and into international expansion. We hold top 2 position in Finland, Denmark and Norway, and we have a challenger position in Sweden, the largest market in the Nordics. We are focused on strengthening our position to 2030 and beyond. We have delivered on our 2025 targets with improved profitability across all markets, while delivering robust growth, especially in Sweden and Norway. We have invested a lot in our digital capabilities to provide an effortless banking experience. In 2022, about 40% of our customers' daily banking needs were covered by self-service functionalities. Today, we stand at close to 75%, and the customers like what they get. Our mobile app enjoys a top rating. Customer satisfaction has increased. In Sweden, we have the highest satisfaction of the peer group. Sustainability has been integrated into our business, and we have significantly grown our sustainable finance portfolio. New data-driven tools and streamlined processes have improved our overall structural efficiency. We now deliver 49% more income per FTE than in 2022. With a strong position among mid-corporates, a leading digital offering and a track record of solid growth, we are well positioned to enter the next strategy period. We are ready to take Business Banking to the next level. We see clear opportunities to continue taking market share in Sweden and Norway and deepen penetration in attractive segments within our mid-corporate segment franchise. Our best-in-class digital channels and payment strengths provide an anchor for deeper customer relationships. We will expand our focus to the small business segment where digital is significantly changing how small businesses do banking, and our unique scale enables a leading offering at high levels of productivity. The strategic priorities for our 2030 strategy are growing faster than market with a leading customer offering and leveraging our Nordic scale for increased efficiency. At Nordea, everything starts with the customer, and we will make the necessary investments to deliver on our plans. This, together with our clear geographic and segment growth priorities, will enable us to grow income by approximately 1 to 2 percentage points above the market. The opportunities provided by technology, data and AI and the full potential of our Nordic scale will deliver improved efficiency, positive jaws and a cost-to-income ratio below 39%. When accounting for normalizing cost of risk, this will result in Business Banking sustaining a high profitability of greater than 15% return on allocated equity. In the following pages, I will take you through our plan for each of the 3 priorities, starting with growth. Our growth agenda is focused on 4 areas. First of all, we want to win in Sweden. Sweden is the largest market in the Nordics and our strong track record in the current strategy period makes us confident that we will continue capturing market share. We see good opportunities for growth in underpenetrated segments or where we have a structural advantage, such as cross-Nordic SMEs. Secondly, we want to grow in Norway. In the current strategy period, we have outgrown peers in deposits and mid-corp lending. We have an efficient operating model, but we can do more to deepen the customer relationships. And to succeed with this, we will invest in our frontline capacity and expand customer acquisition capabilities. In both Sweden and Norway, we aim to grow 1 to 2 percentage points faster than the market every year. Thirdly, we will focus on building deeper customer relationships. It all starts with payments as a key anchor product. With our strong cash management offering, we can be the house bank. This, in turn, provides further ancillary income opportunities. We expect our ancillary income to grow faster than lending volumes at more than 4% per year. Our fourth growth opportunity is the biggest change compared to the current strategy period, growing in the small business segment. Earlier, we did not have the digital capabilities in place to focus on this segment. Now we do. There are 2 reasons why this segment is an attractive growth area. We are below our natural market share and small companies have a high deposit to lending ratio and many ancillary business opportunities generating attractive returns. We will be welcoming 50,000 net new customers to Nordea through our focus on new customer acquisition and an uplift in our offering. As already mentioned, cash management is the anchor product for deep relationships and house bank position. For example, for mid-corp customers where we have the cash management, we generate about 8x more income, including income from, for example, markets, savings and trade products. Therefore, we will invest to maintain our leading position, always with the ambition to be the house bank. We know exactly which features need development next, and we have the plans in place to do so. Secondly, we know that small businesses spend a significant amount of time on financial administration. We want to give that time back to the entrepreneurs to run their businesses. This we do by building a digital financial hub that goes beyond banking, integrating banking and financial management in one place, our Nordea business platform. Lastly, our experience shows that building sector-specific offerings and expertise strengthens our competitiveness. We will expand the coverage of sector expert teams to important and high-growth sectors across the Nordics. The third pillar of our strategy is about leveraging Nordic scale. First of all, we will improve productivity in the front line. With AI-powered frontline tools that support advisers with customer benchmarks and insights, we will drive smarter engagement and a more efficient way of working. Our Nordic scale is also an advantage in the lending process, which is one of the most expensive processes in a bank. We have started digitalizing this process with a digital workflow that enables straight-through processing. More than 50% of credit cases above EUR 1 million are already managed on this workflow. It will make borrowing money simpler, more transparent and faster. Finally, with our Nordic scale, there is an opportunity to drive efficiency in payments. We will concentrate volumes onto a Nordic platform, reducing unit costs while enabling more self-service, better scalability and more agility. To conclude, we want to be the preferred financial services partner for SMEs in the Nordics. Our 2030 target is a sustained high profitability of greater than 15% return on allocated equity and a cost/income ratio below 39%. Thank you. I will now hand over to my colleague, Petteri from LC&I.

Thank you, Nina, for that strong Business Banking plan. My name is Petteri Ankila. I'm proud to represent the most profitable Large Corporate & Institutions business in our Nordic region. Entering the new strategy period, we will focus on profitable growth while leveraging the high quality of our franchise. We want to become a leading LC&I business in all 4 home markets. We're in an ambitious yet realistic growth path while continuing to keep the costs low and maintaining our high level of profitability. I will now walk you through how we will achieve this. Our starting point is strong. We are a reliable and trusted partner with deep and personal customer relationships across the Nordics. We have leading market positions in all 4 countries with particular strongholds in Denmark, Finland and with our private equity franchise. We have a resilient and well-diversified business model across geographies, customer segments and income lines. Roughly 75% of our income is coming from stable, recurring lending, deposits and transaction banking services. We are a leading debt and capital markets franchise in the Nordics with broad equity and debt financing and structuring capabilities. This is evidenced to us by being continuously selected by our customers to support them in their large strategic transactions. We are well positioned for growth with a unique combination of Nordic scale and local presence. Since our Capital Markets Day 4 years ago, we have repositioned ourselves, transforming into streamlined and return-focused business supported by strict cost and capital management. We have delivered on our strategic priorities and financial targets, achieving an industry-leading approximately 17% return on allocated equity and a low cost-to-income ratio of around 40%. Success has been achieved by driving income growth by being very close to our customers, but also we have broad mix of structural cost reductions and enhanced capital efficiency measures such as originate to distribute and risk-sharing transactions. We have delivered what we promised, and this supports our transition into the next strategy period. So our vision is to become the preferred financial partner for large corporates and institutions in the Nordics. We have clear priorities how to achieve this. Those are: one, grow across priority segments and outgrow in selected markets; two, lead with strong value propositions to increase customer satisfaction; and three, operate with scale advantages and enhance our advisory effectiveness through data and AI. As we deliver results within these strategic priorities, we are to grow approximately 2 percentage points above the market. We will invest in selected strategic areas. In addition, we will leverage our Nordic strength and operational power resulting in efficiency improvements. All in all, we will commit to deliver a cost-to-income ratio below 37% and return on allocated equity of more than 15%. I will now further elaborate on our plan, starting with the growth. Our focus for the next strategy period will be delivering profitable growth with a special focus on Sweden, Norway, increasing gross sales and growing the infrastructure segment of our leading private equity franchise. Firstly, we will win in Sweden by growing revenues more than 2 percentage points faster than the market. We will deliver this through a strong focus on real estate, corporate infrastructure and event-driven transactions. We will deepen our existing customer base while growing in selected segments supported by increased proactivity by our client-facing people. Furthermore, we will grow revenues in Norway more than 2 percentage points faster than the market also. To achieve this, we will leverage our well-established platform in Norway and sector expertise, which we have in-house. We see an opportunity to increase our focus on the growing shipping and real estate segments while also increasing our penetration in the fast-growing transition finance and seafood segments. Secondly, we will deepen our customer relationships through product leadership by investing in anchor offerings and commercial excellence tools. We will strengthen our full service offering, including a leading corporate payment solution. We will improve our sales efficiency and leverage our risk management capabilities in markets and our leading debt and capital markets franchise. This will result in total ancillary income growth of over 4% per annum. Thirdly, we will build a leading infrastructure financing portfolio within the private equity segment. Based on our current leading position in Nordic sponsored LBOs, we aim to complement this position with the build-out of infrastructure-related financings. We aim to take a more Nordea-like portion of this sector with strong financing demand from our customers. To summarize, by accelerating our take-up of these identified opportunities, we will grow revenues faster than the market and strengthen our position as a leading LC&I business in the Nordics. To succeed with our ambitious growth plan, we will enhance our customer value propositions and relationship model and improve customer satisfaction. First and foremost, strong customer offerings and relationships are the key to growth. With the customer at the heart of everything we do, we set off with a strong commitment and plans in place to improve customer satisfaction. We will develop a leading relationship model with the goal to reach or retain top 2 positions for customer satisfaction in all 4 countries. Our proposition is built around being a safe and trusted financial partner with deep expertise and strong personal relationships. Comprehensive banking solutions through a broad and leading product offering is a must. In particular, cash management is a critical anchor product and relationship driver where we will upgrade functionality, user interfaces and connectivity to reach top 2 position for this product also. Lastly, we aim to grow our sector focus. Our skilled people with broad Nordic market understanding and industry-specific knowledge will be equipped to deliver the right strategic advice and solutions customized solutions for our customers. This will be boosted by accelerating of data and analytics insights and support. These 3 levers are key drivers for growth and customer value. Our Nordic scale is a true competitive advantage compared to our Nordic main LC&I peers. We will further unlock our scale potential with a focus on enhancing our advisory effectiveness and transfer customer engagement through data and AI. We will also be future-proofing our core product infrastructure to secure modern, resilient platforms and services. This will benefit our customers in all major product areas, in particular, in corporate lending, but also in payments and foreign exchange as additional examples. If we zoom in into the corporate lending, which is our main income contributor with over 50% of our income pool, current credit processes are still too manual and way, way too long lead times for our customers. Therefore, as one of our Nordic scale initiatives, we are focused on improving the process to develop a digital automated and data-driven lending journey. We will digitalize approximately 80% of the end-to-end corporate lending value chain, which includes also corporate customer in Business Banking with Nina. With improved efficiency and quicker time to decision, we will reduce the marginal cost while improving customer experience at the same time. So our LC&I 2030 strategic agenda is clear. We will grow above the market with special focus on Sweden, Norway, increasing cross sales and the infrastructure segment of our leading private equity franchise. We will do this while maintaining the high quality of our franchise, enabled by leading offering and Nordic scale. We have the best, passionate and competent people, a real winning team mentality and drive for everyday improvements to serve our customers even better tomorrow than today. This is how we will realize the potential of our business. Our foundation is strong, and we have what it takes to become the preferred financial partner for large corporates and institutions in the Nordics. Thank you. That concludes our 4 business area presentations. If we have time, we will now pause for a 15-minute break. Thank you. [Break]

Ladies and gentlemen, we kindly ask you to retake your seats.

Welcome back from the short break. I hope you're getting ready for the next presentations. My name is Kirsten Renner, and I'm the Head of Group Technology and CIO. It is my pleasure to share with you how we will leverage technology, data and AI to deliver on our strategy. Financial services are undergoing a major transformation driven by technology. We see customer expectations continuously increasing. Modern infrastructure like cloud and soon quantum computing creating new opportunities. And AI is at an inflection point where Gen AI and Agentic AI will disrupt our lives. I believe Nordea is very well positioned to capture this opportunity with technology, data and AI being at the heart of our 2030 strategy. Let me share with you how we plan to deliver what we call Nordic scale. We have a very strong starting point, but you might remember that until 2019, we had a vision that our new core banking platform would replace our entire technology estate. However, we've learned along the way that a one-solution-fits-all program is not the best way to go, or as Frank said, there's no silver bullet. We have learned that technology modernization does not start from implementing a new technology tool. It needs to come from solving a customer problem. And when we work to deliver for the customer, we modernize the technology as we go. We also learned that transformations are not executed as a one big bang program, but need to be modular, multiple smaller changes that deliver real benefits and can happen in parallel. This is why our Nordic scale will start at the customer, not the technology, and it will be delivered in parallel streams. In the past years, we have applied that learning already, and we have focused intensely on our customers. We have prioritized the technology that mattered most to them, digital front end. We have leveraged our Nordic scale by developing one Nordic solution and deploying it across all 4 countries. This has helped us to achieve a market-leading position in digital banking across the Nordics with top ranking in mobile app and digital front-end experience. Today, we are proud that we provide 100% self-service in daily banking, and we have over 5 million digitally active customers. In the coming strategic period, we will again make a step up, extending this good work to also address the technology behind our products and processes. We will leverage technology, data and AI to outperform our competition in both customer experience, resilience and cost efficiency. In short, the same way we delivered on our digital ambitions, we are now building a modern, scalable technology backbone that delivers faster value, higher resilience and sustained competitive advantage for Nordea across our channels and markets. You have heard Frank and my business colleagues speak about the growth ambitions and our Nordic scale plans before the break. I will now elaborate on how we can achieve this with positive jaws. In short, we're streamlining our customer journeys with a Nordic-first approach to enhance customer experience and increase efficiency. Nordic-first means that whatever we design and build for our customers, regardless of which country the wish started, will be done with our Nordic customer and business in mind. This way, we will be faster in providing new features to our customers across our region. And it's not about building a new one-size-fits-all solution. It's about maximizing reuse of local expertise and group-wide technologies. To deliver seamless customer experience, we do not only harmonize products and processes, embed AI and modernize the underlying technology and data estate, so we really deliver Nordic skill front to back. This way, we are convinced that we can sustain our market-leading customer experiences, deliver even better products and processes at significant efficiencies. Let me make this promise very concrete. Through Nordic scale, we will deliver EUR 600 million of gross annual savings by 2030. In the next pages, let me elaborate on the components that add up to these savings. Talking loan products. The transformation is all about fast, transparent and scalable processes through automation and digitalization. If I put it very simple, our customers just want to know whether we grant them their loan application. And if so, how fast can they access it. So we automate our processes, enrich them with AI data collection for faster origination, and we use AI productivity for smoother fulfillment. By 2030, we will have 90% of the mortgage loan promises automated and 60% of the SME loans straight through process. Looking at savings and investments, our focus is on delivering a market-leading digital experience. As you've heard from Sara and Martin, we built one digital platform for our customers, enabling fully self-service savings and using AI for proactive and personalized interactions. The digital savings and investment platform will be built on our consolidated and resilient markets infrastructure, the same platform that our dealing rooms use to access the Nordic and international markets. This will provide a fast and smooth experience for our retail customers, self-directed investors and Private Banking segments. By 2030, we aim to support our advisers with digital tools, data-driven insights and simplify processes, having between 30% and 50% higher advisory efficiency across our businesses. Now we deliver fast, simple, resilient and trusted payment solutions. Before the break, Nina and Petteri have spoken about our payments ambitions already. Today, we have our global payment engine. This is a resilient and modern payments platform that enables us to provide payment services, including instant payments and account-to-account transactions. And we are incrementally migrating our legacy payment flows out of our legacy applications onto this engine, resulting in 45% less applications in the payment space by 2030. When it comes to cards, we streamlined our products and increased the self-service availability by 40%, making it easier for our customers to manage their cards themselves. With our modern and Nordic payments infrastructure, we will be ready for new developments like digital currencies. AI. It's not new to Nordea. We're building on a strong foundation, and we're accelerating adoption across our organization. Our chatbot is widely used by customers and employees, and many of our people are using AI assistance and productivity tools daily. We've also applied AI in our financial crime prevention when we automated parts of the know your customer and transaction monitoring processes. We're accelerating now our AI journey by working on 3 time horizons for AI value creation. We continue to scale our everyday productivity like coding assistance and tools to provide customer-facing recommendations. But we also transform core business processes like lending with AI-driven automation for personalized conversational banking experience. And in the longer term, we foresee a world where customers' AI agents are talking to our AI agents about their financial services needs. We expect Agentic AI to reinvent customer services and internal operations to next-generation autonomous banking experiences. And we will be there to provide safe and trusted AI solutions. It's going to be very exciting times, if I may say so. So technology and data is central to our competitive advantage, driving superior customer experience, resilience and productivity. We apply our Nordic scale strategy front to back to fully reap the benefits. We begin with the customers' products and processes and then continue to simplify 4 key layers: applications, data, infrastructure and people. First, we concentrate the functionality onto fewer applications. Second, we simplify the data architecture to faster time to value. Third, we modernize our infrastructure, transition to a hybrid cloud environment where we can blend the best features across public cloud and our own data centers. And finally, we introduced best-in-class engineering tools and practices to make our engineering talent more efficient. Nordic scale for technology means that we enhance and modernize our applications, data, infrastructure and the way we work. As a result, we will have a simpler, more modern technology estate with about 60% of our workloads on modernized technologies by 2030. This is quite an achievement considering we deliver this without closing the shop or diverting our focus from our customers. On the contrary, we're accelerating modernization of elements with long life cycles. I am convinced this positions our landscape competitively within the European financial services sector as our modernization will deliver faster time to market for new customer features, strengthened resilience of the platform and greater cost efficiency. I know I've shared a lot of details on our plans and how we will deliver on our promise. So let me wrap up with a summary. In this strategic period, we will harmonize group-wide data to deliver more personalized sales and services. We will streamline and automate journeys in all our channels with Nordic first. We will embed AI to drive continued business value while stepping up modernization of our technology and data estate. This will strengthen our system resiliency and security, and it will boost efficiency through stronger engineering practices and teams. Our targets towards 2030 are to achieve a gross annual cost saving of EUR 600 million and to have 60% of our workloads on modernized technology. In one sentence, we will deliver Nordic scale, accelerated by technology, data and AI. I would now like to welcome our CFO, Ian Smith, on stage. Thank you.

Hello, everyone. I'm delighted to be here today to walk you through our financial plan and flesh out the path to our 2030 targets. We're building on a foundation of real strength, and I'm excited to share how our strategy will deliver for Nordea, our customers and our shareholders. As Frank highlighted in his presentation, over the past 6 years, Nordea has delivered a significant turnaround in profitability from underperformer to market-leading return on equity. In doing so, we've outperformed our peers in the measures that matter. And our EPS growth has comfortably exceeded that of the European Banks Index. Rates have helped lift performance in recent years, but rates have helped everybody. This is not a story about higher rates or silver bullets. It's about relentless focus on growth, operating performance and structural improvements across many different areas. And importantly, Nordea offers something that few of our peers can match, leading returns with low volatility. Key to this is diversification across countries and business mix, across P&L revenue lines and in our well-constructed credit portfolio that avoids concentrations. We're in a strong position today, having delivered on all of our targets in our current strategy period. Now Frank has covered in detail what makes up that strength and performance improvement across the board, not simply in financial metrics. We've delivered on growth, winning market share, especially in Sweden and Norway. We've improved our operating efficiency despite inflationary pressure while investing heavily in growing our business and making Nordea a more resilient and secure bank. Alongside investing, we focused on day-to-day productivity and efficiency bit by bit throughout the period, the Nordea Lifestyle. In the first 9 months of this year, we were the best in market on ROE. And in our recent Q3 results call, one analyst asked me a good question about our cost-to-income ratio compared to peers. And despite heavy investment in the last couple of years, we're significantly better than our European peers, of course. And the latest results show that we are firmly in the pack amongst our Nordic peers. Now obviously, in the pack is not good enough for this team. And today, we'll show you how we improve our operating efficiency over the coming years. We've delivered on our targets while maintaining a low cost of risk and capital returns to shareholders have exceeded expectations. At our last CMD, we promised EUR 15 billion to EUR 17 billion of capital returns to shareholders by the end of 2025. Including the current buyback program, that figure will be almost EUR 17.5 billion. We're well placed for the road ahead. The economic assumptions that underpin our plan for the next 5 years highlight the strength of the economies in our 4 home markets, higher than the European average. Importantly, we expect to see relative interest rate stability, a contrast to the ups and downs of the last 3 years. We plan prudently. It gives us a strong base from which to deliver further value creation, growing income and delivering superior structural efficiency gains against the backdrop of a stable economic platform. Frank has introduced our 2030 targets and the strategic priorities that will help us deliver it, and my colleagues have filled in the details. Our plan is clear: deliver superior EPS growth at sustainable market-leading profitability. We will grow faster than the market and drive structural efficiency through Nordic scale. So our firm 2030 targets, ROE above 15%, that's a minimum 15%, throughout the strategy period. And when you consider that our plan is based on strong growth in capital-light deposit and fee income, improved efficiency and our customary capital discipline, we expect it to be significantly higher in 2030. Our cost-to-income ratio in 2030 will be between 40% and 42%, excluding regulatory fees, delivered by positive jaws over the strategy period. And all of this amounts to an ambition to deliver around EUR 2 EPS in 2030. Now what's the difference between a target and an ambition? At Nordea, we treat a target as a firm commitment to deliver in a broad range of market conditions. But one thing we cannot control is market growth and macro. So our ambition is based on market growth assumptions that may turn out differently and therefore, give a different outcome, in this case, for EPS. We've talked about the key building blocks of the strategy. This slide summarizes them well. Strong income growth and structural efficiency gains are at the heart of our plan. Income growth comes from 2 different blocks. Holding market share and growing at pace with the economies in our 4 home markets delivers income CAGR of 3%. And then there are key areas where we think we have the keys to unlock higher-than-market growth. We'll deliver structural efficiency improvements by leveraging the full potential of our Nordic scale. This is a pivotal element in our plan as it is a core differentiator to our peers. And lastly, I want to highlight capital. Capital excellence will continue to be an important tool to deliver ROE and EPS. We'll continue to operate our business for capital efficiency and in accordance with our capital policy. You can expect our strong capital returns to continue. Now as I mentioned, we view our income drivers through 2 lenses: what can be delivered by growing in line with the economy, market momentum, if you like, and where we can grow faster than the market. Taken together, we estimate total income growth of 1.5x the market growth rate. My business area colleagues covered Nordea's growth potential in lots of detail, so I'm not going to repeat that here. But let me just say, there are no heroic assumptions here. We will grow income by leveraging Nordea's strong market position across the Nordics and by delivering on clear growth plans in focus areas where we have both a right to win and a growing track record, such as Sweden. Importantly, this growth comes with improvements in efficiency, and I'll turn to the cost aspects next. Growth with strong cost efficiency is critical to the continued improvement of our operating performance. Now entering this new strategy period, the group's cost base is around EUR 5.4 billion. Around 60% of that is people and a further 20% is technology, together 80% of our costs, where inflation is somewhat higher than CPI. Average wage inflation in 2025 across our locations was around 4%. And while the outlook is for that to moderate slightly, it's still above headline. And IT cost inflation isn't going away anytime soon. So we assume regular cost inflation and cost increases from higher volumes of around 4%, of which we will offset a portion with our regular productivity gains and other efficiencies. Our regulatory fees, of course, hard to predict. And absent any other information, we assume a modest increase driven by higher volumes. And we'll also continue to invest in making Nordea, a more resilient bank. Cost growth from business momentum, therefore, is expected to be around 2.5%, with modest positive jaws. What makes the real difference to our operating performance is what we do on top of that. The income delivered through our 6 growth areas presented by my colleagues today comes with a low marginal cost income ratio, supported by investments in technology, limiting the impact of incremental run costs for the growth areas. And the Nordic scale will take further cost out for some additional investment. The Nordic scale initiatives set out by Kirsten will deliver right across the group, will give us at least EUR 600 million of annual gross cost reductions by 2030, more than 10% of the cost base. Investment to deliver those process and technology efficiencies, along with increased focus on AI will reach a run rate of around EUR 250 million by 2030. This is not an increase in our overall investment need. We're already investing heavily, and you've seen our step up in technology and risk management investment in the last couple of years. This is a rotation of investment spend where Nordic scale becomes the #1 priority for Nordea. This is hard, focused work across a wide range of detailed initiatives and it requires discipline to deliver. But we're very confident in our plan and the savings that will accrue. Together with effective management of momentum cost inflation, our low-cost incremental growth and the benefits of Nordic scale, we will limit group cost increases over the period to 2030 to 2% CAGR or better. Just to be clear, this level of cost growth is planned to support substantial growth in income. And if the income environment turns out to be different, we will manage costs accordingly. Now process efficiencies and greater use of technology, including AI, will mean fewer people in Nordea. And as demonstrated already this year, you'll see net reduction in FTE over the strategy period. This all requires some restructuring costs. And the amount is not yet settled, but it's not expected to be material. And certainly, lower than the last restructuring provision we took 6 years ago. And this is likely to be booked in full in 2026. So with 2030 cost growth limited to 2% CAGR or better, what's the outlook for Nordea's cost-to-income ratio? A reminder first, we're going to change how we report our cost-to-income ratio from 2026 onwards. We'll exclude regulatory fees. We think it's sensible to set aside an item we can't control and focus on the things where we will make a positive impact, and the revised approach also makes us consistent with most of our Nordic peers. Our cost-to-income ratio exiting 2025 will therefore be around 45%. And we expect to bring this down to 40% to 42% by 2030. While, of course, we don't know what other banks are aiming for, we believe this will be very strong compared to our Nordic and European peers. The improvement in our cost income ratio comes from an above-market income growth, so more than 3%, together with cost discipline that delivers positive jaws. Now the income growth and the structural cost savings net of investment will build over the period to 2030. And we're going to establish strong momentum in our growth initiatives right off the back. Martin calls me every week to ask me how many new private bankers he can hire. And we continue to invest to deliver on Nordic scale. But our progress will not be linear, meaningful change doesn't always go in straight lines. But we aim to improve our operating performance, and therefore, our cost-to-income ratio every year from 2026 to 2030. And we're confident we'll meet our target of 40% to 42%. Now our commitment is to give you plenty of color as we go on how our key growth and efficiency initiatives are progressing, so you can assess that we're on track to deliver and we'll provide our usual annual guidance on performance metrics. So moving from cost-to-income ratio to loan losses. We gave revised guidance on annual loan loss charges on our 2022 Capital Markets Day where we said that 10 basis points on average was what you could expect. Since then, and despite the challenges for our customers posed by inflation and higher interest rates, the Nordea portfolio has been strong. Our underwriting and credit management approach has served us really well over the years, and we aren't making any changes to them. And we don't expect to see a shift in the portfolio mix either. So we repeat our guidance of around 10 basis points for the coming strategy period. Although the quality of the credit portfolio suggests it ought to be a little lower than that in most years. As you know, we've been making small releases of our management judgment buffer over the last few quarters. This has been driven by strong portfolio performance that meant the reasons for holding the buffer have diminished over time. As things stand, and we should always be mindful of potential shocks given the turbulence over the past couple of years. In 2026, we expect the buffer to be fully utilized in strengthening our model provisions or released. Turning now to capital. Capital excellence has been an important lever over the last 4 years to drive profitability. It will continue to be an important tool in our new strategy to create shareholder value and support higher profitability. And I can say, we've got a strong reputation in this space. So let's start by highlighting some important capital assumptions that underpin our plans. We assume a working CET1 ratio of 15.5%, similar to today's level. Capital requirements have stabilized, and we don't expect requirements to increase markedly from this point. Our capital policy is also unchanged. 150 basis points of management buffer above our CET1 requirements, appropriate also for the new strategy period. So we move on to the dynamic pieces in the plan. We'll continue to generate capital strongly around 80 to 90 basis points per quarter before dividend as previously guided. And we'll deploy this capital to fund our growth ambitions and distributions to our shareholders. Over the period, 2026 to 2030 all else equal, we expect to distribute more than EUR 20 billion to shareholders via dividends and buybacks. And of course, this excludes the impact of any Nordic bolt-on acquisitions that may occur. But you know our approach, we won't sit on excess capital. We expect REA to grow by approximately EUR 40 billion, primarily driven by our ambitious growth plans, but also from the introduction of the output floor under Basel IV. Now before the outlook floor becomes finding, as previously guided, we expect real relief of EUR 4 billion to EUR 6 billion from our retail IRB model upgrades. Our nonretail models have been submitted for approval, and we currently expect those models to be implemented in 2027. For now, we assume no real reductions from the nonretail models in our capital plans. We consider that REA inflation from the output floor is very manageable with clearly defined mitigating actions. We assume a EUR 10 million REA increase or 5% inflation, net of efficiency actions such as securitizations. And finally, on dividends. Firstly, our annual dividend payout policy is unchanged at 60% to 70%. But I'm pleased to announce that from next year, subject to shareholder approval, we'll introduce an interim payment of the annual dividend, thus moving to 2 dividend payments per year. We plan to make advanced distributions of the annual dividend to the tune of 50% of first half profits. And this is how it's going to work in practice. Our new dividend approach should be in place next year following the Annual General Meeting in March 2026. After shareholders give us a mandate, we'll declare an advanced distribution at the 2026 Q2 results based on first half profits, and this will be paid after the summer. Later, at the AGM in March 2027, we'll propose the full dividend for the year 2026. If approved, shortly after the AGM, we'll pay out the full year dividend less the advanced distribution made 6 months before. And I trust this initiative will be welcomed by our shareholders. Back in 2022, we presented a view like this of our 18 business units, primarily 4 BAs across 4 countries. And we talked about our performance management approach in that matrix. That approach will continue. We expect each business unit to deliver growth and improve profitability, and we allocate capital to drive those outcomes. The BA and business unit targets are always clear and well understood. It's a critical underpin of our performance management approach and how we drive maximum benefit from our scale and diversification. Nordea will be the best-performing financial services group in the Nordics in 2030. We target a sustained market-leading ROE, always above 15% and expect our ROE to be significantly above 15% in 2030. With above-market income growth and cost efficiencies driven by Nordic scale, our cost-to-income ratio in 2030, excluding regulatory fees, will be between 40% and 42%. And we will grow EPS strongly throughout the period with an ambition of around EUR 2 per share by 2030. Thank you for joining us today, and we really look forward to answering your questions.

All right. So we are ready to start taking questions. So just a quick instruction in the room. So if you can raise your hand, you'll get a microphone brought over and then state your name and the firm from -- where you're from before the question and maybe limit to 2 questions max. While we get the microphone to the first one, I'll shoot off one from the webcast, which is from Nicolas McBeath. He asked about the flexibility around the guided 2% cost growth. So if revenue growth turns out below your assumptions, will you take down cost growth to get to the 2030 cost income target? And how dependent on the revenue environment is the cost income target?

Ian, please.

So we -- thank you. I mean we highlighted that, of course, the world can turn out differently. I think what is important to understand here is we have clear plans for cost efficiency and cost reduction. Some of the cost increases that we would experience would be related to growth. And of course, if that turns out to be lower, then we have the opportunity to adjust both cost and investment. So I think the key message to take is very focused on delivering an improvement in the cost-to-income ratio. And that commitment is there irrespective -- certainly to make that improvement irrespective of the income environment. But the reason we have a range is because we recognize that uncertainty.

And I see Andreas has the microphone. So go ahead.

It's Andreas Hakansson from SEB. Some of us are getting a bit old and 2030 is far away. So I'm trying to understand, if we look -- you talked about the EUR 600 million savings by 2030, but you need to take investments to get there. So should I understand that there will be investments upfront, which means that upfront, you're going to have higher than 2% cost inflation, and it's going to be lower towards the end of the plan? And can we try to get some sort of feeling that where we would be like in 2027, 2028, when I'm still going to be modeling this bank?

Yes. Ian, will you try to help.

Yes. So thanks, Andreas, and I'm sure you're younger than me, so. But as I said in my presentation, yes, we do have this balance of investing to improve customer outcomes, but also to deliver on structural efficiencies. So our progress towards our 40% to 42% cost-to-income ratio as I said, will not be linear. But then also understand our commitment. We said that we would expect to improve our operating performance and our cost-to-income ratio every single year through this period. So expected to build and deliver more strongly towards the end of the period for the reasons you outlined, but we will improve every year.

Shrey Srivastava from Citi. Another one for Ian, if I may. Within the bridge from your cost income this year to the cost income in 2030, there's obviously a sizable NII component. And when I look at your rate assumptions, I can see your forecasting basically in line with the forward curve rates to sort of increase going through to 2030. If we were to disaggregate the NII uplift from structural business improvements and volume growth and the impact of rates, how much would this affect your cost-to-income target?

So there is absolutely something -- a strong benefit from having positive rates. And we do expect positive rates throughout the period. And I think that's very different from when we stood here almost 4 years ago. And those rates contribute both in terms of lending margins, but also deposit margins. But the strength of this plan is it delivers on every line. And I'd point, I guess, to the ambition we have in our PBB and Asset & Wealth Management business for strong growth in savings. And those elements of our plan are income growth plan, but are not entirely NII dependent. So savings, life and pensions, working with small businesses or cross sales, all of those things that deliver above-market growth that aren't NII dependent. So I think our plan is strong and stands on many legs.

Tarik El Mejjad from Bank of America. Just a couple of questions, please. First, on costs. I mean why the pan-Nordic scale AI does not allow you to grow cost less than inflation. What's the burden there? So 2% is the kind of implied cost growth you have and the same as inflation you have in your assumptions? And same question also on AI. You mentioned that numerous times in your presentation. So when you had these 3 time frames, when you have the long-term buckets, how long term are we talking? And the agentic kind of AI, which is clearly an evolution in the banking system has been already started in some Eurozone banks, so I mean, clearly, you want to be in the forefront of AI, how fast that's going to be implemented?

Ian, if you take the cost part, then Kirsten will take the AI part, please.

Yes. So look, we -- CPI projections are 2%. As I said in my presentation, 80% of our cost base inflation is 4% or more. So what we're committing to here is actually below inflation cost growth over the period. Wage inflation alone is around 4%. So I think if you tease apart those different elements, our inflation -- real inflation is above headline, and we're doing better than that. So I think this is actually a pretty strong cost performance.

So maybe on AI, these 3 horizons are within the strategic period. Agentic AI has already started. There's something we need to consider when we talk about the definition of Agentic AI. There is AI agent small things that take pieces of your workflow or that aid advisers when they talk and support customers. That is shorter term, I would say. But the longer term, an agent truly autonomous talking on behalf of the bank to customers has obviously also a risk profile that we need to be very certain of before we just put it out there. So definitely interesting technology developments, and we follow it closely, but there's both customer use cases that we're investigating, customer appetite, risks, risk understanding, risk appetite, and that will drive the timing of our deliveries.

This is Martin Ekstedt from Handelsbanken here. Can I just first check in on the M&A topic with you. There was very little mentioning of M&A today. So I wanted to check, is it baked into the plan that you presented today that you will continue to do roughly 1 M&A deal consuming, say, was it 30 basis points of core Tier 1 per annum roughly over this period. So that was my first question. And then secondly, maybe one for Ian. Could I just quickly check if the advanced dividend distribution, I mean if the dividend payout ratio target is 60% to 70%, why is the advanced dividend distribution set at 50% and not at 60%?

Thank you, Martin. So let's start with the M&A part. In our updated strategy, we have our bolt-on acquisitions as a strategic pillar, but of course, the right target must be for sale. The plan and the figures that we show here are all based on organic growth. That means that we will deliver with the business we have. If something comes for sale, well, of course, assess what that will deliver of value to our shareholders and what it will consume when it comes to capital. So meaning they are not included.

And on our ambition for advanced distribution proportion, I guess, Martin, at that level compared to other banks across Europe that distribute, we are more generous. And I think that reflects the confidence in the stability and consistency of our earnings. And we balance that generosity, I guess, with understanding that there's more development to go through the year. So I think it's a good start point for us and of course, more generous than our European counterparts.

Okay. I think Johan first and then Magnus next.

Johan Ekblom here from UBS. So 2 questions, I guess. First to Frank. I think at Q3 earnings call, you promised us some information in AI. So thank you very much for that. But you also said that you talk about things that maybe didn't work. There were some things that were very promising and some things where costs were prohibitively high. So maybe some more color on where have you explored AI, where current cost structures don't allow you to proceed. So interesting to see what those kind of cases would be. And then a nitty gritty, maybe for Ian here, just on the cost side, I guess, 2 questions. You said that the restructuring charge next year is likely to be smaller than the one in 2019, which I believe was around EUR 200 million. Is that included in the improving cost income next year, so that's including the restructuring charge? And then also with these investments you're making, is there any change to your capitalization policy? Are there any large investments that are expected to be capitalized at the front end of this period, just so we can understand the developments?

All right. Thank you for the questions, Johan. So let me start with the AI and then Kirsten, you could check in. There's no doubt that AI will transform many banking processes over the coming years. That we are very certain about, honestly. But there's no doubt either that you should go blind into investing in AI because it's a hyped topic, and you must show the world that you do as well as the others, you will lose. So you will have to figure out where do you get enough return for the money because what you will figure out is, it is quite costly in several areas to get right and to deliver value. I think where we are now is in a good place, as we have not been a fast mover, we have probably been a fast follower, making our learnings, understanding where the benefit comes, understanding what the risks are, understanding where we can scale. And that's what we are going to do now. And the cases that we have is actually quite promising. But yes, a bit more color, please?

Yes. So maybe to add the color. I think if you look at the plain vanilla productivity tools that everybody is rolling out very widely. They're nice, they're convenient, but do they really deliver full productivity. We like them. We appreciate them. We work with that, but there's actually much more potential in using AI and AI beyond machine learning when we automate our processes. So what data can you effectively use? And how can you generate GenAI, how can you generate something that advisers or ultimately customers can use? I think the processes that we've most experienced with in the financial crime prevention space, that is where it truly is helping us in the example of know your customer and towards transaction monitoring. So it has to be -- if I can call it that, bigger than the plain vanilla productivity tools that you would use at home or maybe also in your collaboration tooling. So definitely, that is where we want to bet on more and invest in more. And if you then look at what are the examples that we also spoke about today, in the product flows, where we have to collect data and recommend customers that is where GenAI more than robots can add value. Mortgages, consumer lending, corporate lending, payments flow, savings and investments, where investments, I think, is a next level of interest in when it comes to conversational AI.

And then the last part of your question was that...

So Johan, you have some technical points. First, on capitalization. No change to capitalization policy. But importantly, actually, what I think we'll see over the strategy period is probably slightly lower capitalization rates because the things we're investing in hybrid cloud transition, early-stage AI lend themselves less to capitalization. And there's nothing in the works in the short term that is a large spend that goes immediately onto the balance sheet. So I wouldn't be looking for anything unusual there. And then in terms of improving our cost/income ratio every year and importantly, next year. Our commitment there is excluding any restructuring costs.

Then Magnus up here.

Magnus Andersson at ABG Sundal Collier. First of all, the message has been quite clear about winning Sweden and growing in Norway. So I was just wondering if you could say something about how you look at Denmark and Finland and specifically, potentially inorganic growth opportunities in Denmark considering what's happening there, we've been waiting for consolidation for a long time. And secondly, perhaps on -- just on costs, now you communicate around 2% cost growth, roughly 2 percentage points of jaws. In the last plan, you had 1% to 2% cost growth, 2% jaws, should we read that as that you have come longer in your efficiency-enhancing journey and now focus more on growth although it's perhaps not a huge difference, but at least slightly more than you did in the last plan for that reason?

Thank you for the question, Magnus. I'll start with the M&A part, and then Ian will take the other part of the question. So let's be very clear. This is the strategic plan. So why we highlight Sweden and Norway is that we want to change our size structurally in these 2 countries. We have lower scale there than in the 2 other countries, but it's not about not growing in the other countries. So when you think about the 6 drivers or levers we have, the growth areas, 4 of them cuts across the entire Nordics, private banking, cross-sales, life and pension and the small businesses, that goes for all countries. Then we have 2 countries where we will invest even more to structurally improve our size and our position. So let me say this, we have the same recipe in the other countries as we have had until now, plus the 4 growth pockets that we have now in our areas we have, and we have growth plans in place in both the countries that you mentioned, Finland and Denmark already now. So no big change in that regard, just even more attention to structurally lift the 2 others to more -- just to get more the size market share-wise, as we have in Finland and Denmark.

May I just follow up. Could you say something about the profitability differences between your 4 markets?

The best I can say is that you can look at the Ian's charter, there you'll see it roughly where the business areas are. We have 18 business portfolios and all are actually in very good shape. Some are in very, very good shape. Some are fine and some are on the way. Most are really looking good. Finland and Denmark are a profitable market we are very happy about and they are in a strong position. We want to grow a little bit more in Denmark in a couple of the areas, but the starting point is very, very strong. Finland is a 30% market share country for us. It's highly profitable. It's a more slow growing country right now. We believe that they will improve, but we still have pockets where we can outgrow the market, and that we will ensure will happen. And one of the areas is private banking another one is life pension, cross-selling and small businesses. When it comes to bolt-on acquisitions, so one of you said that we had -- that was you, Martin, as I said, we have done one in average each year. That's right. We like bolt-ons, they come with quite low risk. They fit well into the platform we have, the franchise we have. And it's -- we have learned quite a lot on how to implement them or integrate them. So we welcome very much bolt-ons in the Nordics that can strengthen Nordea either on distribution, on product or services like technology or other. And I think I'll stop there then. So very positive, yes.

And Magnus, your follow-up question on those jaws, but also the relative contribution of cost and income. If I take you back to Frank's presentation where we talked about the first 2 strategy periods that we've executed on together. The first was about sorting out the basics. The second was establishing that market-leading profitability through a bunch of different levers. This next one is -- there's a lot more in it, and that's partly why 2030 is so much in focus. We think we've got so many different opportunities, whether it be on the income or the structural efficiency side. Maintaining those positive jaws, at least 2%, I think, over the period is very much in focus. But there is a bit more growth in here. And I think we've been clear about where we think we can grow and why we think we have a right to win. So this is definitely about saying, I think, Frank, profitability is solved. This is now about delivering at that market-leading profitability, but now we need to deliver growth. And I think that's going to be a really strong story for Nordea.

Let's go with Jacob and Sofie.

So first, I just wanted to ask on the IT stack and what you're doing there. So when it comes to the cloud investments and, I guess, inference for the AI, is that going to be something you run? Or is it going to be outsourced? And in that context, do you expect to start disclosing a bit more of those costs in your financial reporting? And then secondly, I guess, on the same topic, a lot of these process improvements that you talk about, do they have staff implications? And if so, what kind of magnitude are we talking about?

Let me start on the tech stack. And let's start at the point, let's recognize that in our sector, the technology has quite a high level of complexity, so do we. We have a blend of data centers, so on-prem technology as well as public cloud. We are growing towards a hybrid environment, which means that we can move workload around between our own data centers and the different cloud providers, which allows you to avoid things like vendor locking. There's -- the investment levels that we have in the plans and the strategic plans include the investments spent on AI. Some of that we do with our own staff and some of that we do with partners. Obviously, we look at which partner on a regular basis and how we work with that where we choose the strategic efforts to do ourselves. But obviously, a cloud hosting is something we outsource.

I'll take the one on costs?

Yes, please do.

So to the extent that we talked today about some big changes in the structure of our cost base, and I also made the commitment that we'll give you plenty of color as we move through the strategy period on delivering the benefits of Nordic scale and also where we're investing. So you can expect us to provide color on how we spend our money because it will look differently. Frank, there was also a question about process efficiencies and people.

So in regards to people implications, we will be fewer people in Nordea during the next 5 years. That's very clear. Technology nowadays plays a significant role within Financial Services, and the role of technology will just increase quite significantly in the coming years as well. So when we let or when we replace people with technology, some will do other stuff. We will rescale or reeducate. We will train people, and we will be better in the meeting with our customers, but the number of employees will go down.

Sofie?

Sofie from Goldman Sachs. So thank you for the presentation. I think it was very clear and maybe just going back to slides that you are going to gain market share, especially in Sweden and Norway. Can you maybe just talk a little bit about from whom are you going to gain market share? And how do you see the competitive advantage we read in the press that U.S. banks have much less regulation. It's easier for them to penetrate in Europe. Southern European banks have a lot of excess capital. They are also looking for growth. You have the fintech sector who is quite keen to grow. So how do you think about like competition in the Nordics over the next 5 years? And also from which entities do you expect to get the market share. And then just a follow-up question. In terms of the rate sensitivity, you still guide, I guess, for EUR 350 million to EUR 450 million from a 50 basis point cut. So if rates only grow 2% on average in 2030, I guess, that would mean EUR 700 million to EUR 900 million of less revenues compared to your plan. Would that change, the cost-income ratio target because I guess, EUR 700 million to EUR 900 million is around 2% of your cost-to-income target? And then also a follow-up question on the output floors, when we do the back of the envelope calculation, we get to kind of significantly bigger impacts than 150 basis points. Could you just detail a little bit more where the offsets come from? How much SRTs you're planning to do, what capital optimization you can do? Can you sell assets and how you can mitigate that impact?

Thank you for the questions. We will try to boil it down to 2 as we asked for in the beginning. So the first one will be about mortgages and -- but you also added that question about challenges in general and then rest of Europe, and it became very big question. I would say we are not concerned about the challenges that comes from fintechs or newcomers to the Nordics. This is our backyard. We are very good at what we are doing, and we are developing very fast and learning a lot. We welcome the competition, and we intend to come out of the next period, 5 years period as the winner. On mortgages, specifically on Norway and Sweden. Anything to add?

Yes. Well, our plan is to take market share across the board and especially our incumbent peers. And we've seen it. If we look at the path that we've had in Sweden, we've been very consistently, I think the last 5 to 6 years -- 7 you say, not missing even a quarter of not winning the market. And just the latest -- the last Q3, our front book market share in Sweden was 20%, where the back book is 14%. So it's been very systematic strong progress. And there's -- we will continue. The key elements there is that we have a very strong, I would say, platform to provide a very good digital experience for our customers. And we call it a home buying platform where customers can see very clearly where are they in the mortgage process and they can submit their documents, very smooth and easy. Then we've been taken care of, and we will take care of our availability and the speed. We hear a lot of our broker -- real estate broker partners that we are very responsive. We're very speedy and that we will continue to do. And then there's one element, which we see both in Sweden and in Norway, and that is our hunger for growth. And that's in the culture. That's very difficult to copy by anyone. And that's very strong, and we are in a very, I would say, positive spiral in both of the countries of really being eager to grow and win the customers. So that's the way.

Thank you, Sara. Ian, please.

Sure. So Sofie, thanks. On rate sensitivity, I'll go back a little bit to my answer to Shrey's question, which is, first of all, this plan stands on a number of legs, not just NII. But if we see rates move differently and go lower than expected, it's not always easy to offset that. And one of the reasons we have a range in our cost-to-income ratio target is to cater for those sorts of differences. So we remain very confident in delivering on our target. And if we have a more favorable rate environment, then you can expect us to be towards the better end of that target. And on output flows, you need to sort of think about timing of impact here. I'll tease you a little bit. We've had some questions about why go out to 2030 and isn't that a long time. The real -- the biggest impact of the removing of transitional rules happens after 2030. So up to then, we've got gross impact on REA. We estimated about EUR 15 billion. We will mitigate EUR 5 billion of that, we're estimating EUR 10 billion and therefore, 5% reinflation in the plan. The big piece that relates to unrated corporates and the loss of transition rules happens after 2030, but that's also well in hand in terms of thinking through how that gets dealt with.

I think we have Namita.

Namita Samtani from Barclays. My first question, with the cost initiatives in Nordic scale, is Temenos still involved in that? And what's your relationship with now? Or are you -- have you finished that? And my second question is on large corporates. I noticed on the slide there's an ambition to grow in Norway and shipping was mentioned. And I just wondered why that was the case given the 100% risk weighting there. And surely, that's not a very profitable part of the market for Nordea?

Could I just start with -- before you answer on Temenos and I'll ask others on shipping. You can rest assured that where we spend our shareholders' money will be in areas that are profitable and will add value to Nordea. So we are not here to grow. We could like this grow tomorrow. And we could, by the way, also reduce or improve our cost-to-income ratio very fast. But it's very difficult for most to do it with a market-leading profitability. That's a recipe of Nordea. And that's why we will use this recipe going into the next round as well. So rest assured. Temenos and then Petteri, please.

Yes. So I didn't call out the vendor name, but when I was speaking about the learnings with our core banking program, I think it was about that originally, we believe that this software package would solve all problems in our technology estate. And I think we now have it positioned within the estate. We still work with them on our account within the technologies. And as Frank has mentioned, Denmark and Finland is in there, and we're now progressing to the other countries. So it is part of it, but it's not the silver bullet that just automates everything we have in our state. So we will have different components for products, for processes for digital, but definitely still part of our estate, and I think we have an okay relationship as we go.

Yes. Maybe on shipping quickly. So we see obviously the foreign trade continuing and the shipping growing with that one quite well in the coming years, and we want to be part of that. And they need to also renew their ships with less CO2 heavy ships and engine and whatnot. So we see a lot of interest in that area. We also believe that the risk flows are too high, and we will diminish some of that.

Yes. And just to support on that. So let me take the technical bits here. When we implement our nonretail models, the floor on shipping falls away. Now we can't say what other good ideas the ECB might come up with to counteract that. But when we implement our nonretail models, the shipping floors go. And then secondly, what I would say is that, we often have conversations with investors and analysts around use of securitization and those kinds of things. And we're pretty disciplined about how we use it. But one of the areas where you can find an obvious dislocation between what the market thinks your credit risk is and what your regulator thinks it is, is in shipping. And so as we are dealing with temporary headwinds through a floor or whatever securitization and other tools are also a legitimate way to ensure that you get a better capital outcome on that particular portfolio. So I think it's a combination of -- Petteri says strong demand in that space, presenting a great opportunity for us, and we have line of sight to lower capital requirements on shipping.

And we have a good position in that industry with our clients as well. So it's quite natural.

Then Bettina?

Bettina from BNP. I had a question on margins, actually. We talked a lot about growth today, and it seems like you're very, very confident. And I think someone said hunger for growth. When I think, for example, about lending margins in Sweden on the mortgage side, they are at low levels. What are sort of your assumptions, what happens to those? Is there a normalization implemented in the plan? Or I assume you're not trying to win the growth via pricing? If you just could comment on that? And then similarly, I think this is a question for Martin. In the Asset Management business, we had a bit of margin compression, and part of it is also due to a mix shift to lower-margin products? And what is your outlook on that part? Do you expect that to continue to stabilize from here onwards?

Could I just start briefly with an overarching answer to that question and then say a little bit about the margins and then over to was it Ian -- or Martin, yes. You're right that the margins across the Nordics right now are a bit compressed. The main reason for that is that the growth has been limited. Is this something we have not seen before? No. And when you have been running businesses for many, many years in the Nordics, you would have seen this many, many times. We are used to thin margins. I don't think the margins will be significantly different. They will probably come a bit up on the lending side as long as the growth starts to increase, at least that has been the history or our historic development, but why we are quite good running businesses in the Nordics in general. We, of course, best. But in general, is that the Nordics are built on efficiency and execution capability. So we are used to thin margins. And that's why the cost efficiency for Nordic company in the culture of the Nordics means a lot. It starts with being efficient and then the prices we cannot control. So we're very comfortable, we're confident that we will manage this no matter how the margins will develop in the coming years. Martin, over to you?

If I can comment especially in Sweden, we definitely haven't been winning the market by pricing. We are amongst the highest priced. It's very open data. So to win, it's much more about the experience we provide to customers and what I explained earlier. So that is also going forward. So it's winning through pricing. Pricing is important, of course, in a commodities market, you need to be with the right price, but that's not the way. And therefore, as Frank said, being very competitive in a commoditized market, you need to have a kind of a set of way to do it. And therefore, the experience is very, very key.

Sure. Martin, please.

Yes. I think it's a bit of an understatement, maybe even, but we have had, of course, significant margin deterioration, specifically in our institutional and wholesale distribution segments. I think the last 3 years have also had outflows. So that combination has been quite difficult for us. On a high level, how we model the new strategy period is basically we -- the institutional, both Nordic and international, we have a slight decline of margins, but there is no drama. In the wholesale distribution segments, we are modeling margin deterioration to continue at a much lower pace than we have seen now specifically '25, '24 and the beginning of '23. And to put that in context of private banking, for example, we are with a very ambitious value propositions and the alternatives and discretionary and margin lending. We aim to defend the private bank margin as we have today. So those 3 segments. And then in Sara's, the Asset Management delivering to retail, we also have a slight, but no drama decline on margins. But that is all included in the plan for 2030.

Very helpful. If I can just ask on the lending margins, so the plan does not assume a significant increase again in the margins on that front. Do you assume stable lending margins going forward? Or a recovery?

Well, our expectation is that when the market and the rate environment normalizes a bit that, as said, typically, there's been at that type of a situation, a bit of improving margins because -- and especially in the Swedish market, it's been quite -- it's been lower margins now than we've expected. So it has taken some time. But that's not something we bet on. So that will not -- the margins then will be in a commoditized market what they are.

Maybe if I can just add one small. It's not necessarily on the savings on the front book. It is much more with what kind of mix you have of the asset management products.

Let me take one from the webcast. So there's a question around the strategy to grow in small business segments. So how can Nordea attract small business customers as the financial partner?

Nina, please.

I didn't hear it well?

How can we attract...

How do we attract? Okay. We have carefully looked at the ones that are successful in winning small businesses across the world and of course, especially in Europe. And we see clearly that there are 2 crucial things that are signs of successful actors. One is very quick onboarding and the second one is quick access to products. And that is exactly what our plans entail. We will make sure to have digital onboarding and very quick access to the products that our small company customers want to have to support their businesses.

And then the product offering is somewhat wider than just traditional banking products. And that is also included in our plan.

Not that many hands up. And maybe Tarik you want to go?

Just I was disciplined with 2, so I can ask another one. So just on the lending growth, especially in Sweden, more about trajectory than actually your end kind of point. So where do you see the household lending picking up? Is it from next year? What kind of trajectory you see there? And why do you think the fiscal stimulus next year can actually accelerate that recovery in lending growth in household?

Yes. Sara?

We overall -- if we talk about on average across the Nordics, we expect some 3.5% lending growth on this period. And then clearly, Sweden been the one market where the growth is the highest, where we expect that to be a bit shy of 5%. So -- then as we know, it's not, of course, exact or linear how it goes, but we expect that growth in housing and the mortgage market will pick up more as we've seen the past 2 years, I think.

I think in general, what you do see now is that the -- what we have been saying all the time is that we believe it will pick up is starting to happen now. And it has taken longer time. And I think that's not because of this financial foundation. Households are very cash rich. They pay their bills. They dream about the house, they dream about investments. They dream about retiring one day and then have a good start to the third part of their life is just that the uncertainty and thereby the consumer confidence has been so low due to the uncertainty in the world. I think we have learned in the Nordics to live with this is the case, and then there have been some improvements that basically have let people start to believe more in the future. And that goes across the Nordics. Finland being the slowest. And I would say, Denmark and Norway being the fastest, but Sweden is starting to show the right signs in our view now.

And I think we'll take -- there's 2 questions in the webcast. So let's take those maybe. So first one on loan losses. So you're maintaining the 10 basis point loan loss ratio assumption despite the last 5 years being significantly below in a challenging macroeconomic environment. So what's the reason for this? Are you planning to slightly increase risk appetite to defend margins and ROE?

So thank you. No plans to significantly increase risk appetite here. I think what we're saying is that we expect loan losses to be very low. And the 10 basis points is made up of an assumption of a blended rate between our household and corporate customers. But importantly, I said -- but given the strength of the portfolio and I guess, consistent with the experience of the last few years, but in most years, we would expect it to be below 10 basis points. So I think the message you should take from what we're guiding here is same strong credit performance from Nordea as we've seen over the last few years.

Okay. And then there's one more. Maybe this is the last question, I think, that we'll take. And there's a question around the divisional cost income ratios. So adding those up, looking at the weighted average, it seems to indicate below 40. But can you clarify that?

Sorry -- the aggregate of the divisional ones comes in lower than the group.

Yes. Exactly.

So look, our business areas have ambitious plans and have a strong understanding of what their growth and the benefits of Nordic scale will deliver for their operating performance. There's always an element there of understanding the mix and match and reality will be different. And so setting a group cost-to-income ratio with that in mind, I think, gets you to what is still an extremely ambitious 40% to 42% by 2030. So I think what you should take away from that is business areas that are very focused on delivering strong improvements in operating performance and a group that will look very different and much stronger than even where we are today in 2030.

Well, I think that's it for the questions and answers. So let's hand over to Frank for some closing words.

Thanks so much, and all of you, I want to thank you for joining us today and for the many great questions. We have outlined our plan for a successful third phase of Nordea's development and growth. Our third act so to speak. We believe that we have a great plan, and of course, plans and priorities are worth very little without the determination to deliver. I can assure you everyone here and back home is committed to taking Nordea to the next level.